Update: The House voted on the bill Thursday, and it passed – capped at $12.5 million and 10 barrels a day.
OKLAHOMA - The budget crisis has some questioning the millions in tax breaks our legislature gives for big oil, including an oil company executive.
Longtime oilman Mike Cantrell is throwing his support behind a bill that could save the state more than $100 million next year.
It would put a cap on a rebate for oil wells that don’t make a profit.
Last year, our state gave oil and gas companies more than $600 million in tax credits and rebates.
One rebate is for wells that don’t make a profit or 'at risk' wells.
Usually, that added up to about $10 million per year but, next year, that’s on track to be more than $130 million.
“I think it's kind of difficult to take that money when they're firing thousands of people. To me, that just doesn't pass my common sense meter,” Cantrell said.
Cantrell has been in the oil business since the 1970s.
He said his industry should lead others by giving up some tax credits at a time our state is hurting from a $1.3 billion budget shortfall.
Cantrell is in favor of an amendment to cap the rebates for wells that don’t make a profit at $25 million.
“At some point, the pigs need to pull away from the trough and let the folks that are doling out the feed do it in an orderly manner,” Cantrell said.
“At least, at this time, with these prices, it doesn't make a lot of sense to give away hundreds of millions of dollars in this particular credit this way,” said Rep. Scott Inman.
Some lawmakers said a cap at $25 million isn’t enough.
The Senate just voted to eliminate the at-risk well program altogether.
The amendment to the House bill is being pushed by the Oklahoma Independent Petroleum Association.
They said keeping the program is a fair compromise.
“I’d say the oil and gas industry pays one quarter of all taxes paid in the state right now, pay production tax, on top of payroll, sales, excise,” said Oklahoma Oil and Gas Association President Chad Warmington.
The amendment would make the rebate only for wells that produce less than 15 barrels a day.
Experts predict the cap would save $108 million next year.
The House is expected to vote on the bill Thursday.